PEOPLE Singapore is one of the most densely populated countries in the world. The annual growth rate for 2004 was 1.3%, including resident foreigners. Singapore has a varied linguistic, cultural, and religious heritage. Malay is the national language, but Chinese, English, and Tamil also are official languages. English is the language of administration and also is widely used in the professions, businesses, and schools.

The government has mandated that English be the primary language used at all levels of the school systems, and it aims to provide at least 10 years of education for every child. In 2005, primary and secondary school students totaled about 532,225, or 12.2% of the entire population. In 2005, enrollment at the universities was 43,663 (first degree full-time/part-time) and 58,880 at the polytechnics. The Institute of Technical Education for basic technical and commerce skills has almost 21,600 students. The country's literacy rate is 95.4%.

Singapore generally allows religious freedom, although religious groups are subject to government scrutiny, and some religious sects are restricted or banned. Almost all Malays are Muslim; other Singaporeans are Taoists, Buddhists, Confucianists, Christians, Hindus, or Sikhs.

HISTORY Although Singapore's history dates from the 11th century, the island was little known to the West until the 19th century, when in 1819, Sir Thomas Stamford Raffles arrived as an agent of the British East India Company. In 1824, the British purchased Singapore Island, and by 1825, the city of Singapore had become a major port, with trade exceeding that of Malaya's Malacca and Penang combined. In 1826, Singapore, Penang, and Malacca were combined as the Straits Settlements to form an outlying residency of the British East India Company; in 1867, the Straits Settlements were made a British Crown Colony, an arrangement that continued until 1946.

The opening of the Suez Canal in 1869 and the advent of steamships launched an era of prosperity for Singapore as transit trade expanded throughout Southeast Asia. In the 20th century, the automobile industry's demand for rubber from Southeast Asia and the packaging industry's need for tin helped make Singapore one of the world's major ports.

In 1921, the British constructed a naval base, which was soon supplemented by an air base. But the Japanese captured the island in February 1942, and it remained under their control until September 1945, when the British returned.

In 1946, the Straits Settlements was dissolved; Penang and Malacca became part of the Malayan Union, and Singapore became a separate British Crown Colony. In 1959, Singapore became self-governing, and, in 1963, it joined the newly independent Federation of Malaya, Sabah, and Sarawak--the latter two former British Borneo territories--to form Malaysia.

Indonesia adopted a policy of "confrontation" against the new federation, charging that it was a "British colonial creation," and severed trade with Malaysia. The move particularly affected Singapore, since Indonesia had been the island's second-largest trading partner. The political dispute was resolved in 1966, and Indonesia resumed trade with Singapore.

After a period of friction between Singapore and the central government in Kuala Lumpur, Singapore separated from Malaysia on August 9, 1965, and became an independent republic.

GOVERNMENT According to the constitution, as amended in 1965, Singapore is a republic with a parliamentary system of government. Political authority rests with the prime minister and the cabinet. The prime minister is the leader of the political party or coalition of parties having the majority of seats in Parliament. The president, who is chief of state, previously exercised only ceremonial duties. As a result of 1991 constitutional changes, the president is now elected and exercises expanded powers over legislative appointments, government budgetary affairs, and internal security matters.

The unicameral Parliament currently consists of 84 members elected on the basis of universal adult suffrage, and up to nine "nominated" members of Parliament. A constitutional provision assures at least three opposition members, even if fewer than three actually are elected. A "nonconstituency" seat held by the opposition under this provision since 1997 was again filled after the last election held on May 6, 2006. In the May 2006 general election, the governing People's Action Party (PAP) won 82 of the 84 seats. The president appoints nominated members of Parliament from among nominations by a special select committee. Nominated members of Parliament (NMP's) enjoy the same privileges as members of Parliament but cannot vote on constitutional matters or expenditures of funds. The maximum term of anyone in Parliament is 5 years. NMP's serve for two and a half year terms. Voting has been compulsory since 1959.

Judicial power is vested in the High Court and the Court of Appeal. The High Court exercises original criminal and civil jurisdiction in serious cases as well as appellate jurisdiction from subordinate courts. Its chief justice, senior judge, and twelve judges are appointed by the president. Appeals from the High Court are heard by the Court of Appeal. The right of appeal to the Privy Council in London was abolished effective April 1994.

Ambassador to the United Nations--Mr. K V Vanu Gopala MENON Ambassador to the United States--Prof. CHAN Heng Chee

Singapore maintains an embassy in the United States at 3501 International Place NW, Washington, DC 20008 (tel. 202/537-3100, fax 202/537-0876).

POLITICAL CONDITIONS The ruling political party in Singapore, reelected continuously since 1959, is the People's Action Party (PAP), now headed by Prime Minister Lee Hsien Loong. Lee succeeded Goh Chok Tong on August 12, 2004. Goh now serves as 'senior minister' and Lee Kuan Yew holds the title 'Minister Mentor', a newly created position.

The PAP has held the overwhelming majority of seats in Parliament since 1966, when the opposition Barisan Sosialis Party (Socialist Front), a left-wing group that split off from the PAP in 1961, resigned from Parliament, leaving the PAP as the sole representative party. In the general elections of 1968, 1972, 1976, and 1980, the PAP won all of the seats in an expanding Parliament.

Workers' Party Secretary General J.B. Jeyaretnam became the first opposition party member of Parliament in 15 years when he won a 1981 by-election. Opposition parties gained small numbers of seats in the general elections of 1984 (2 seats out of a total of 79), 1988 (1 seat of 81), 1991 (4 seats of 81), 1997 (2 seats of 83), 2001 (2 seats of 84) and 2006 (2 seats of 84). Meanwhile, the PAP's share of the popular vote in contested seats decreased from 75% in 2001 to 66.6% in 2006. In the 2006 election, opposition parties together contested 47 of the 84 seats, the largest number in 18 years.

ECONOMYSingapore's strategic location on major sea lanes and its industrious population have given the country an economic importance in Southeast Asia disproportionate to its small size. Upon independence in 1965, Singapore was faced with a lack of physical resources and a small domestic market. In response, the Singapore Government adopted a pro-business, pro-foreign investment, export-oriented economic policy framework, combined with state-directed investments in strategic government-owned corporations. Singapore's economic strategy proved a success, producing real growth that averaged 8.0% from 1960 to 1999. The economy picked up after the 1997 regional financial crisis, with a growth rate of 9.4% for 2000, but then fell back in tandem with the economic slowdown in the United States, Japan, and the European Union (EU), as well as the worldwide electronics slump, so that GDP shrank by 2.4% in 2001. The economy rebounded in 2002, expanding 4.0%; but it posted a slower 2.9% growth in 2003, due to the effect of severe acute respiratory syndrome (SARS) in the first half of the year. From 2004 to 2006, the economy expanded by 8.8%, 6.6%, and 7.9%, respectively, driven by the growth in world demand for electronics, pharmaceuticals, other manufactured goods and financial services, and in the economies of its major trading partners--the United States, EU, Japan, and China, as well as expanding emerging markets such as India.

Singapore's largely corruption-free government, skilled work force, and advanced and efficient infrastructure have attracted investments from more than 7,000 multinational corporations from the United States, Japan, and Europe. Foreign firms are found in almost all sectors of the economy. Multinational corporations account for more than two-thirds of manufacturing output and direct export sales, although certain services sectors remain dominated by government-linked companies.

Manufacturing and services are the twin engines of the Singapore economy and accounted for 26.9% and 63.2%, respectively, of Singapore's gross domestic product in 2006. The electronics and chemicals industries lead Singapore's manufacturing sector, accounting for 32.4% and 32.5%, respectively, of Singapore's manufacturing output in 2006. To inject new life to the tourism sector, which faced a 20% fall in receipts between 1993-2000, and a declining share of East Asia Pacific tourism receipts from 8.2% to 5.8%, the government in April 2005 approved the development of two casinos that should result in investments of more than U.S. $5 billion.

To maintain its competitive position despite rising wages, the government seeks to promote higher value-added activities in the manufacturing and services sectors. It also has opened, or is in the process of opening, the financial services, telecommunications, and power generation and retailing sectors to foreign service providers and greater competition. The government also has pursued cost-cutting measures, including tax cuts and wage and rent reductions, to lower the cost of doing business in Singapore. The government is actively negotiating free trade agreements (FTAs) with 16 key trading partners and has already concluded 11 FTAs, including one with the United States that came into force January 1, 2004.

Trade, Investment, and Aid Singapore's total trade in 2006 amounted to $510 billion, an increase of 13.2% from 2005. In 2006, Singapore's imports totaled $239 billion, and exports totaled $271 billion. Malaysia was Singapore's main import source, as well as its largest export market, absorbing 13.1% of Singapore's exports, with the United States falling behind to 9.9%, from 10.2% in 2005. Singapore was the 15th-largest trading partner of the United States. Re-exports accounted for 47.3% of Singapore's total sales to other countries in 2006. Singapore's principal exports are petroleum products, food and beverages, chemicals, textile and garments, electronic components, telecommunication apparatus, and transport equipment. Singapore's main imports are aircraft, crude oil and petroleum products, electronic components, consumer electronics, microelectronics manufacturing equipment, motor vehicles, chemicals, food and beverages, iron and steel, and textile yarns and fabrics.

Singapore continues to attract investment funds on a large scale despite its relatively high-cost operating environment. The United States leads in foreign investment, accounting for 24% of new commitments to the manufacturing sector in 2005. As of 2005, the stock of investment by U.S. companies in the manufacturing and services sectors in Singapore reached about $48.1 billion (total assets). The bulk of U.S. investment is in electronics manufacturing, oil refining and storage, and the chemical industry. About 1,500 U.S. firms operate in Singapore.

The government also has encouraged firms to invest outside Singapore, with the country's total direct investments abroad reaching $104 billion by the end of 2004. China was the top destination, accounting for 12% of total overseas investments, followed by Malaysia (8%), Hong Kong (7%), Indonesia (7%), and the United States (5%).

The United States provides no bilateral aid to Singapore.

Labor In December 2006, Singapore had a total labor force of about 2.5 million. The National Trades Union Congress (NTUC), the sole trade union federation, comprises almost 99% of total organized labor. Extensive legislation covers general labor and trade union matters. The Industrial Arbitration Court handles labor-management disputes that cannot be resolved informally through the Ministry of Labor. The Singapore Government has stressed the importance of cooperation between unions, management, and government ("tripartism"), as well as the early resolution of disputes. There has been only one strike in the past 15 years.

Singapore has enjoyed virtually full employment for long periods of time. Amid slower economic growth in 2003, unemployment rose to 4.6%. As of end-December 2006, the rate of unemployment dropped to 2.7%. Much of the unemployment is structural, as low-skill manufacturing operations move overseas. Since 1990, the number of foreign workers in Singapore has increased rapidly to cope with labor shortages. Foreign workers comprise 30% of the labor force; the great majority of these are unskilled workers.

Transportation and Communications Situated at the crossroads of international shipping and air routes, Singapore is a center for transportation and communication in Southeast Asia. Singapore's Changi International Airport is a regional aviation hub served by 83 airlines. A third terminal is slated to open in 2008, and a dedicated low-cost terminal for budget airlines was completed in 2006. The Port of Singapore is among the world's busiest and ranks second globally as a center for containerized transshipment traffic, after Hong Kong. The country also is linked by road and rail to Malaysia and Thailand.

Telecommunications and Internet facilities are state-of-the-art, providing high-quality communications with the rest of the world. Radio and television stations are all ultimately government-owned or government-linked. The print media is dominated by a company with close ties to the government. Daily newspapers are published in English, Chinese, Malay, and Tamil.

DEFENSE Singapore relies primarily on its own defense forces, which are continuously being modernized. The defense budget accounts for approximately 32% of government operating expenditures (or 5% of GDP). A career military force of 53,300 is supplemented by 300,000 persons, either on active National Service, which is compulsory for able-bodied young men, or on Reserve. The Singapore Armed Forces engage in joint training with Association of Southeast Asian Nations (ASEAN) countries and with the United States, Australia, New Zealand, and India. Singapore also conducts military training on Taiwan.

Singapore is a member of the Five-Power Defense Arrangement together with the United Kingdom, Australia, New Zealand, and Malaysia. Intended to replace the former defense role of the British in the Singapore-Malaysia area, the arrangement obligates members to consult in the event of external threat and provides for stationing Commonwealth forces in Singapore.

Singapore has consistently supported a strong U.S. military presence in the Asia-Pacific region. In 1990, the United States and Singapore signed a Memorandum of Understanding (MOU) which allows United States access to Singapore facilities at Paya Lebar Airbase and the Sembawang wharves. Under the MOU, a U.S. Navy logistics unit was established in Singapore in 1992; U.S. fighter aircraft deploy periodically to Singapore for exercises, and a number of U.S. military vessels visit Singapore. The MOU was amended in 1999 to permit U.S. naval vessels to berth at the Changi Naval Base, which was completed in early 2001. In July 2005, the United States and Singapore signed a Strategic Framework Agreement to expand cooperation in defense and security.

FOREIGN RELATIONS Singapore is nonaligned. It is a member of the United Nations--it occupied a rotational seat on the Security Council 2001-02--and several of its specialized and related agencies, and also of the Non-Aligned Movement and the Commonwealth. Singapore has participated in UN peacekeeping/observer missions in Kuwait, Angola, Namibia, Cambodia, and East Timor. It provided a training unit to assist in training Iraqi police, and Singapore has deployed naval ships, air force transport planes, and refueling tankers to the Persian Gulf to support the multinational coalition effort to bring stability and security to Iraq. Singapore supports the concept of Southeast Asian regionalism and plays an active role in ASEAN and the Asia Pacific Economic Cooperation (APEC) forum.

U.S.-SINGAPORE RELATIONS The United States has maintained formal diplomatic relations with Singapore since that country became independent in 1965. Singapore's efforts to maintain economic growth and political stability and its support for regional cooperation harmonize with U.S. policy in the region and form a solid basis for amicable relations between the two countries. The United States and Singapore signed a bilateral free trade agreement on May 6, 2003; the agreement entered into force on January 1, 2004. The growth of U.S. investment in Singapore and the large number of Americans living there enhance opportunities for contact between Singapore and the United States. Many Singaporeans visit and study in the United States. Singapore is a Visa Waiver Program country.

The U.S. Government sponsors visitors from Singapore each year under the International Visitor Program. The U.S. Government provides Fulbright awards to enable selected American professors to teach or conduct research at the National University of Singapore and the Institute of Southeast Asian Studies. It awards scholarships to outstanding Singaporean students for graduate studies at American universities and to American students to study in Singapore. The U.S. Government also sponsors occasional cultural presentations in Singapore. The East-West Center and private American organizations, such as the Asia and Ford Foundations, also sponsor exchanges involving Singaporeans.

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